Yesterdays article kormorant.co.za26 Apr 2013 13:40
http://www.kormorant.co.za/2013/04/crocodile-river-mines-future-in-the-balance/?x=68&y=4
Eastern Platinum Limited (Eastplats) announced on Friday that the company had decided to suspend funding for the Crocodile River Mine (CRM) Development Plan. Eastplats said in a statement the decision is the result of the continuing negative outlook in the global economic environment and the current stressed operating environment in South Africa. Crocodile River Mine employs more than 1 305 people whose futures are now at stake. The development plan funded by Eastplats, was implemented to reduce costs and improve efficiencies, and to return the mine to profitability, said Ian Rozier, Eastplats president and C.E.O. “The consequence of this funding suspension is that the mine will enter a Section 189 process with the four representative unions to determine restructuring measures. This process is expected to last for at least 60 days as envisaged by the Labour Relations Act,” he said. “The Company will continue to re-assess the viability of production at CRM and reinitiate funding for production once conditions support such a decision.” Crocodile River Mine spokesperson Janet Whitaker said “this is not a mine closure and operations will not be suspended at this time. The company will embark on a process during which the company and its representative unions will endeavour to consider alternative options to sustain operations. THIS PROCESS WILL TAKE AT LEAST 60 DAYS. IT IS POSSIBLE, THAT, SHOULD NO VIABLE ALTERNATIVES BE FOUND THAT MINING AND DEVELOPMENT OPERATIONS WILL BE SUSPENDED.” According to Eastplats CEO, Ian Rozier although production costs have increased by over 15% per year in the last six years, production has fallen by almost 20% in the same time frame, and the metal price in rand terms has decreased. “The situation in which CRM finds itself is simply not sustainable,” he said. “To continue mining in current circumstances would be irresponsible and not in the interests of shareholders or any other stakeholders, as it undermines the long-term sustainability of the operations, could result in the sterilization of assets and could, potentially, compromise safety and health. “Eastplats has invested more than R8 billion in South Africa since 2006, particularly in infrastructure and development that will stand the mine in good stead for the future when production is able to resume. Eastplats will continue to fund CRM’s social and environmental obligations during the funding suspension period.” “The company will do everything it can to reduce job losses, and will engage constructively with unions in this regard. Eastplats had advised the Minister of Mineral Resources that they were considering this course of action, and will continue to keep the DMR apprised of developments.”
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